Key victories on EU deforestation law, but challenges remain

25.07.2022

The planned EU legislation on deforestation-free supply chains has completed two significant steps on its way to becoming law.

The regulation’s goal is to minimise the EU’s impact on forest loss worldwide by banning from the EU market specific commodities, such as soy and beef, which are linked to deforestation. It seeks to meet its goal by imposing supply chain due diligence obligations on companies that import and trade in these products.

On 28 June the Council adopted its position on the Commission’s Proposal, and on 12 July the European Parliament Committee on the Environment, Public Health and Food Safety (ENVI) voted on its amendments.

While ENVI voted to strengthen the Commission’s proposal, the Council’s position risks seriously weakening the law.

Next, the plenary will vote on the European Parliament’s final amendments before trilogues start, where Parliament and the Council will negotiate the final law.

The amendments proposed by ENVI include a number of measures Earthsight had advocated for, as well as new provisions that address campaigning priorities by other civil society organisations. Below we highlight some of the key wins, as well as issues that still need to be fought for in the coming months.

Logging in the Brazilian Amazon Shutterstock / Tarcisio Schnaider

Enforcement mechanisms

Important wins were made in ENVI to strengthen the law’s enforcement mechanisms, which would help ensure that it will actually work in practice.

Earthsight has previously argued publicly and to policy makers directly that the regulation ought to include a mandatory public list of non-compliant businesses, as this would provide a powerful additional incentive for compliance and be less dependent on national competent authorities’ willingness to issue dissuasive penalties. Such a list has now been included by ENVI.

ENVI also increased the number of checks competent authorities ought to carry out annually, from 15 per cent to 20 per cent for operators importing from high-risk countries, and from 5 per cent to 10 per cent for standard-risk countries. A 5 per cent level for checks from low-risk countries was also introduced.

ENVI strengthened the access to justice provisions for persons with sufficient interests, requiring fair, equitable and timely access to a court or other independent and impartial public body, and the provision of adequate and effective remedies for those negatively impacted by business activities.

These same provisions were unfortunately weakened by the Council. The Council’s position does not include a public list of non-compliant actors, and decreases the amount of checks to be carried out (to 1 per cent for standard-risk countries, and to 5 per cent for high-risk countries. In addition, the Council removed the article on access to justice altogether. This had guaranteed access to court to review the decisions, acts or failure to act of the competent authority, including for substantiated concerns submitted by third parties. By calling for weak enforcement mechanisms, the Council thereby risks seriously undermining the effectiveness of the planned law.

Certification

Third-party voluntary certification schemes were not given a ‘green lane’ in the Commission’s proposal, meaning that companies would not be able to rely on so-called green labels in lieu of conducting their own due diligence. However, companies can use information supplied by such schemes as “complementary information” provided that the information meets the information requirements set out in the regulation.

ENVI and the Council have not moved to provide a greater role to certification schemes in their positions, which is crucial to ensure the effective functioning of the law. Earthsight has repeatedly exposed how the wood certification scheme Forest Stewardship Council (FSC) has accredited goods linked to illegalities, for instance in Russia and Ukraine, and has therefore argued that a reliance on these schemes in the upcoming regulation would be a disaster.

ENVI in fact recognised the importance of Earthsight and other NGOs’ arguments and proposed removing the Commission’s reference to a revision of what role certification schemes should play once the law has come into force.

Brazilian indigenous people living in the Amazon Shutterstock / BW Press

Inclusion of international human rights

While the Commission’s proposal failed to include specific references to international human rights, ENVI voted to require companies that place or export goods from the EU market to ensure compliance with human rights protected under international law, including specifically customary tenure rights and the right to free, prior and informed consent (FPIC). Under the international legal framework, FPIC is a right pertaining to indigenous and tribal peoples, allowing them to give or withhold consent to a project that may affect them or their territories.

The Council’s position also includes an obligation for companies to assess not only national laws but also “labour rights and human rights protected under international law, including as set out in the United Nations Declaration on the Rights of Indigenous Peoples.”

In May, Earthsight’s There Will Be Blood report revealed how supermarkets, fast food restaurants and pet food retailers in Europe are linked to indigenous rights abuses in Brazil and called on policy makers to include the strongest possible indigenous land rights in the upcoming regulation.

This January, more than 190 indigenous, environmental and human rights groups had called for the inclusion of a requirement for businesses to respect land rights as part of the EU Regulation on deforestation-free products.

Product scope

The Commission’s proposal has been widely criticised for the limited scope of commodities covered by the regulation.

While the Council left the Commission’s proposed product scope untouched, ENVI voted to significantly expand it to cover swine, sheep and goats, poultry, maize and rubber, thereby including key contributors to deforestation.

Earthsight’s There Will Be Blood, which exposed how chicken fed with soy linked to indigenous rights abuses and deforestation entered the EU market, had called for the inclusion of soy-fed chicken in the regulation.

Despite huge industry pressure, ENVI supported the Council’s decision to keep leather as a cattle product covered by the new law. Earthsight’s research has shown that industry lobbyists repeatedly peddled misinformation among MEPs to escape regulation.

ENVI also voted to include additional processed beef products, as well as wood products (charcoal and printed paper products), which campaign groups including Earthsight have been advocating for.

However, ENVI failed to add wooden seats to the product scope, despite evidence uncovered by Earthsight that its absence from the scope of the European Timber Regulation has meant large quantities of seats made from stolen wood have entered the EU market.

The Brazilian Cerrado Shutterstock / Carlos Santos Rodapebr

Other ecosystems

The Commission’s proposal would only apply to forests based on the Food and Agriculture Organization of the United Nations (FAO) definition, but not to other ecosystems.

In a positive step, ENVI voted to add “other wooded land” as defined by FAO to the deforestation definition. While this does not provide full protection to other ecosystems, it would go a long way to improve the protection of some biomes. A Trase analysis shows that it would decrease “the unprotected Cerrado area from 74 to 18 per cent. It would reduce the Gran Chaco area unprotected by the legislation from 33 to 24 per cent.” However, large areas of natural grassland could remain vulnerable to EU-driven ecosystem conversion.

Neither the Council nor the ENVI Committee added other ecosystems such as peatlands, savannahs or wetlands to the scope of the Regulation, exposing invaluable biomes like parts of the Chaco and Cerrado to great risk. This is despite overwhelming public support for strengthening the law to cover critical ecosystems other than forests.

Earthsight has previously linked the illegal clearance for cattle of the Gran Chaco – inhabited by one of the world’s last uncontacted tribes – to leather used by some of Europe’s biggest car manufacturers.

Definitions impacting wood plantations

Another remaining issue of contention is the extent to which products from wood plantations that have previously been forests would be considered deforestation-free.

ENVI voted to strengthen the definition of deforestation, seeking to ensure that forest to timber plantation conversion is considered deforestation.

However, the Council did not include forest to timber plantation conversion in its definition of deforestation. Moreover, it weakened the Commission’s proposal by focusing its definition of forest degradation only on primary forests, a definition previously rejected by scientists. In combination with the Council’s definition of deforestation, this would essentially mean that only the conversion of old-growth untouched forests to wood plantations would be considered as forest degradation and timber coming from all other wood plantations that were previously forests would be considered deforestation-free under the law.

Financial institutions

ENVI also moved to add due diligence obligations for financial institutions to prevent financing of deforestation, which had not previously been included by the Commission despite being advocated for by a number of NGOs.

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